The prospect of retirement is likely to make you smile, perhaps as you imagine days filled without much responsibility or accountability. But alas, it's hard to escape those things completely. You're still responsible for managing your money well, so that it lasts you throughout your retirement.
Here are some savvy moves to make in 2026 that can help set you up for a more financially comfortable future.
Image source: Getty Images.
1. Develop a solid retirement plan
If you don't already have a solid retirement plan in place, you need to develop one. Start by estimating how much income you'll need (or want) in retirement, and then think about how you'll get it. It's a good idea to aim to have multiple income streams in retirement. They'll be different for different people, but here's an example of a set of income streams:
|
Income source |
Annual income |
|---|---|
|
Social Security |
$30,000 |
|
Dividends from stocks |
$20,000 |
|
$10,000 | |
|
$20,000 | |
|
Total |
$80,000 |
You might also start thinking about what your retirement will look like. If your nest egg isn't as plump as you'd like, you might plan to work a part-time job in your first years of retirement, to give your income a boost. Think about when you'll retire, too.
You may like the idea of retiring early, but remember that that means your income streams will need to support you for longer. After all, if you retire at, say, 55, and then live to age 95, you've got a 40-year retirement. You'll need to be quite sure that despite inflation, global developments, and more, you won't run out of money.
Think, too, about the cost of healthcare, which is enormous for many of us and tends to increase in retirement. You can sign up for Medicare at age 65, but plan for how you'll cover your health until then.
2. Save aggressively -- starting now
Most people are woefully behind in their saving and investing for retirement. The best remedy for that is starting to sock money away as soon as possible -- after all, your earliest invested dollars are your most powerful ones, as they have the most time in which to grow for you.
The table below shows how your money could grow over time at an 8% growth rate. It makes clear how your nest egg could be growing by leaps and bounds after a few decades of diligence:
|
Growing at 8% for |
$6,000 invested annually |
$12,000 invested annually |
|---|---|---|
|
5 years |
$35,192 |
$70,399 |
|
10 years |
$86,919 |
$173,839 |
|
15 years |
$162,913 |
$325,825 |
|
20 years |
$274,572 |
$549,144 |
|
25 years |
$438,636 |
$877,271 |
|
30 years |
$679,699 |
$1,359,399 |
|
35 years |
$1,033,901 |
$2,067,802 |
|
40 years |
$1,554,339 |
$3,108,678 |
Calculations by author via Investor.gov.
3. Invest effectively
Socking away lots of money isn't enough, though. You also need to invest it effectively, which means not taking on too much, or too little, risk. Too much risk would be exemplified by things such as penny stocks or day-trading or investing on margin. Too little risk would be sticking with typically low-growth investments such as savings accounts.
So consider investing much of your moola in the overall stock market, which has averaged annual returns of close to 10% over many decades, though it could average a good bit more -- or less -- than that over your particular investing time frame. Investing in the stock market can be as simple as investing in one or more simple, low-fee index funds -- such as:
- Vanguard S&P 500 ETF (VOO 1.08%)
- Vanguard Total Stock Market ETF (VTI 1.21%)
- Vanguard Total World Stock ETF (VT 1.38%)
The first will invest you in 500 of America's largest and best companies, which make up approximately 80% of the U.S. stock market's value. The second option offers nearly the entire U.S. stock market, and the third option offers the world's stock market. Many people like to diversify their portfolios with bonds, and if you're interested in that, perhaps consider the Vanguard Total Bond Market ETF (BND 0.28%) or a similar exchange-traded fund (ETF).
As you invest, be sure to make good use of tax-advantaged retirement accounts such as IRAs and 401(k)s. They can help your money grow more efficiently.
4. Plan for Social Security
Start thinking about and learning about Social Security, too. You can start collecting your Social Security benefits as early as age 62, or delay up to age 70, to make them bigger. For most people, the best strategy is to wait until age 70, but it's not best for everyone, and some folks just can't wait for that income.
Think through the issue of when to claim Social Security carefully, as it can make a big difference in your total benefits received. Know, too, that there are multiple other ways to increase your Social Security benefits.
Don't put off planning for your retirement. Even if it's still a decade or two away, you can probably take some steps now to make your future more secure.
